Medicare By Itself

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This show does not offer investment products or investment advice. Welcome to Finishing Well, a certified financial planner, Hans Shile, and today's show is Medicare by itself. And so as I was listening to the video that accompanies this through Cardinal Advisors on their YouTube channel, I was just amazed at how much I didn't know about Medicare, because I've spent so many times, you know, going through this stuff. But it's just wonderful, wonderful, kind of like the gospel, like you can go through it time and time again, and every time you learn something.

And to me, you know, that's kind of like the childlike spirit, like children ask a lot of questions, and they're hungry for information. And so I hope as you go into this show today, that it's like that Bible passage you've read 40 times, and every time you get a little bit more out of it, and you see more the application of it, that here we go to Medicare by itself. And as disciples, right, in Matthew 28, Jesus told us, go and teach. Well, it's really a gift that God has given Hans to teach this stuff so that we can understand it. And so with all that said, here we go on Medicare by itself, Hans.

Yeah, well, I mean, just in your prayer that we said before we started the show, you talked about really, you showed gratitude, and you had gratitude, and we have gratitude about my ability to teach and thanking God for that. And I think that that helps in being a student, and specifically about the subject of Medicare. I mean, there's a lot of cynicism out there, just by the population, and especially people turning 65, where they just not only don't understand this subject very well, they're already cynical about this program, and it really stops them from making good decisions and getting the most out of Medicare.

So I think that some gratitude really in Medicare, along with Social Security and everything else, comes from God. And it just, even though it's delivered by the U.S. government, and people tend to get a little angry about that, we need to remember that this is the health insurance program for people 65 and over, and we're all going to go on it. And what I find is that people coming to me seem to know less about this than they did years ago.

And after they've watched all my videos and listened to me on the radio, and they come to me, and they just, they haven't learned a whole lot about it. And I'm not sure that it's their fault, because the sources of information about Medicare, and then specifically what you need to do about it when you're turning 65, or you've been on it for a while, are not very good. I mean, they're regulated by the insurance company. I mean, there's plenty of government stuff out there, but it's difficult to decipher through a hundred and some page manual.

And then, you know, the information flows controlled by the insurance companies, and a lot of people limit themselves to that. And they're starting with the solution to the problem. When somebody comes and calls on you, or you're doing it on the phone, or you're watching a TV ad, or you've got a salesperson sitting at your kitchen table explaining, what they're doing is explaining the solution to the problem, or they're selling you insurance, and they're working the whole thing backwards. Darrell Bock Right. And if you're like me, and you sit there in the fall, there's commercial after commercial after commercial. If you watch any TV, you're just going to be hammered with all these gimmicks, actually, from my perspective of, you know, you need the gym membership, and you need dental care, and all this stuff.

You don't even get into the art of the matter. Dr. Gerry Breshears Well, that's exactly right. And so people have these messages flying at them. And then they're taking that and deciphering it, and they're and they're learning about Medicare from the end of the game backwards.

And so what I've done on this video, that's on YouTube, and what we're going to do this morning is we're just going to talk about Medicare all by itself, because the program was designed to just be your health insurance. I mean, I've been selling it since 1976. That's 46 years this summer. And, you know, the program was only about 10 years old. And there were a lot of people almost 50 years ago that were 65 and over. And they only had Medicare. And they just relied on Medicare by itself. And they were thankful for it. And when they got sick, they realized the gaps in it, but they were still thankful for it.

And they probably understood it back then much better than they do now. Okay. Okay. So let's, let's spend a little bit of time talking about Medicare by itself. Let's forget the insurance.

I mean, I'm not recommending you do this. It's just for the sake of learning is what would it be if you only had Medicare? That's all you had for insurance. Now, the way that works is Medicare, original Medicare is broken into two parts, Part A and Part B. And it's just like the old timey health insurance policies, you had hospital insurance, and then you had medical and surgical insurance.

You know, and when you get into the words of like Blue Cross, Blue Shield, which was really that's what it was called in the beginning, Blue Cross was the hospital insurance and Blue Shield was the medical insurance. And so they came out with Medicare, you had Part A, which is the hospital insurance, and Part B, which is the medical and surgical experience, insurance. So if you just had Medicare by itself in 2022, and you go in the hospital under Part A, that's where your hospital bill goes, you can stay in the hospital 60 days or come in and go back out and come back in and that kind of thing. And your own liability with Medicare by itself is $1,556. So you could have a $100,000 hospital bill for 10 days in the hospital, and Medicare is going to pay $98,400 of it. So is that per year, or is there a forever timeframe in that? So that's 60 days, what timeframe is that in? That's per condition, or per reason for hospitalization.

Really? You could pay that multiple times within a year. I mean, if you had a heart attack and were in the hospital in February, and then you broke your hip or something, and you were in the hospital again in July, that would be two different benefit periods and two different part A deductibles. So what if you had, say, a heart attack in 1999, and you were in the hospital for 30 days with that, and you had another one in 2015, and you're in the hospital, is that considered the same condition, even though it was years apart? No.

Okay. No, that would be, so it's really per condition, per hospitalization. I mean, it's just, let's not get into the weeds about that. I mean, just understand that if you go in the hospital, you're going to owe $1,556 if you had no insurance. And then if you come out of the hospital, but then you have to go back in for the same thing, you're not going to owe it again.

But that doesn't happen very often. I mean, it's just pretty much under part A, your only liability for a hospital stay is $1,556. Okay? Okay. Now, you can't go in the hospital without incurring part B charges, because everything that's not on your hospital bill, all the doctors, the lab tests before you go in, the MRI, which you do over at some other place, I mean, all that's going to be a part B expense, and that's paid much differently.

Okay? There's a $233 annual deductible. So they had to make these different, but it's in the beginning of the year, the first 233 bucks is on you. And then once you get $233, Medicare pays 80% of their approved charges. So and then you are responsible for 20%. If you didn't have any insurance, which that's the assumption that we're making for this. And it pretty much sounds like your group insurance that you have at work. But a huge difference is there's no stop loss on the 20%. So most group insurance works is that you got to pay 20% of the bill until it gets to where you've paid 5000 out of pocket or 2000 or something like that.

And then it goes to 100%. That never happens with Medicare. So you could, you know, if we went back to that big hospital bill where you had $100,000, and you only owed $1,500 of it out of your pocket, that's pretty good coverage.

It's like 98% coverage. But then if you got to, if you went in the hospital that long, let's just say you had $50,000 of part D expenditures, well, then they would pay 80% of the 50,000 or 40,000. And you'd be responsible for the 10,000 out of pocket.

And there's no limit on the 10,000. Is that clear? Oh, wow. Yeah.

Unfortunately. And so that's the big liability that everyone's ensuring is the 20% without a cap. And that's what the Medicare supplement ends up paying. And that now we're talking original Medicare here. And I'm sure that there's some people listening that are thinking, Well, I don't have to pay 20% of everything. But, you know, you might be on a Medicare Advantage plan. And that's, that's where we can get to that later. But we're talking about original Medicare here. And then most people buy a supplement, which we'll get to in the second part of the show, where we'll talk a little bit about that.

But I want, I'm going to keep going over and over this till people understand you got part A and you got part B. And part A covers most of your hospital bill other than the, let's just call it 1500 bucks. And then part B covers 80% of your everything but the hospital, all the medical expenses and outpatient. And then your responsibility would be 20%.

And the 20% doesn't have a cap or a stop loss on it. Wow, and we got we got a ton to cover. So you know, we got to go to a break. But we want to remind you that all this information again is available at cardinalguide.com as well as Hans's book, The Complete Cardinal Guide to Planning for and Living in Retirement, which is again available at the website as well as a video on the same subject, which is going to be at Cardinal Advisors on their YouTube channel. So we'll be right back with them in a moment with providing all sorts of other information that you are going to just find outstanding when it comes to just what original Medicare was.

We'll be right back. Hans and I would love to take our show on the road to your church Sunday school Christian or civic room. Here's a chance for you to advance the kingdom through financial resources by leveraging Hans expertise in qualified charitable contributions, veterans aid and attendance, IRAs, Social Security, Medicare and long term care. Just go to cardinalguide.com and contact Hans to schedule a live recording of Finishing Well at your church Sunday school Christian or civic group contact Hans at cardinalguide.com.

That's cardinalguide.com. Welcome back to Finishing Well with Certified Financial Planner, Hans Scheil and today's show, Medicare by itself. And so right now we're just going over what happens. Wow, if you end up going in the hospital, there's a lot more to it than just that, right Hans?

Hans Scheil Well, there is. I mean, so that covers 60 days in the hospital, which is a long time these days. But there are people that stay longer than 60 days. And so you know, of your hospital bill, if you only had Medicare by itself, you're going to owe about 1500 bucks for the first 60 days. Now when you hit the 61st day, now you've got a $389 a day copayment.

So now we could start talking about some Jack for somebody that is laying in the hospital for a bunch of days. You're going to pay 389 bucks a day. So that's 3800 and something. And then once you hit 90 days, that amount doubles to almost 800 bucks a day from the 91st to the 150th day. And then after the 150th day, Medicare runs out, it's over.

It's over. So that is a liability on a long term hospital, say. And you know, it's a very rare thing, or a very low percentage, but it does happen. And Medicare is all set up, but they're done after 150 days in the hospital. Darrell Bock Wow, that is when the insurance kind of keeps in. But obviously, you know, it's my experience, they're always trying to get you out of the hospital as quickly as they possibly can.

Hans Scheil Well, they are. And then what they're going to do is they're going to push you into rehab. And then, you know, the rehab, it's really necessary to get Medicare to pay for rehab or skilled nursing. And when they, you know, so you got to come from the hospital first.

So they're using it as a way to get you out of the hospital. And then Medicare itself, once you qualify for that, is going to pay it in full for 20 days. So you've got nothing out of pocket for the first 20 days. And then beginning the 21st day, you've got a copayment of like, almost $200 a day.

And then Medicare pays the rest. But it's rare that they certify you any longer than 30 days. So there's some real complicated stuff with Medicare to make sure you're skilled. And fundamentally, it means are you improving? Or can they see improvement? Can they see improvement in your future? Because you can be really bad off.

But yet you're not improving. And they're going to call you intermediate or custodial care and decertify your Medicare. All being said, there's a schedule and there's a payment system for when you're Medicare approved.

It's going to pay out. Now there's also home health care benefits for skilled home health care. So if they can push you back home, and come out and see you every day and do a little something for you. And that's working out as another way to get you out of the hospital. And Medicare will pay for that. Now, for Part B, like boy, if you're going at home, they also have home health care benefits under Part B.

But this is where people get down, and they start getting all confused. And I really want to go back to what I said originally, is that Part A is hospital, Part B is medical. Part A, you've got a $1,500 essentially deductible, or payment. Medicare pays the rest for the first 60 days. And under Part B, you've got 80% coverage. Medicare pays 80%, you'd have to pay 20%.

So and now we want to talk insurance a little bit. Well, before we do that, can we go back to skilled care just for a minute? Because that isn't like taking a bath or anything, or, you know, skilled care is a really a lot different situation, right? Yeah, I mean, it's somebody that needs help getting in and out of bed, and getting walked to the bathroom, or they need to go to the bathroom while they're in bed. It's somebody that needs physical therapy, somebody that needs occupational therapy, somebody that needs breathing therapy. I mean, it's stuff administered by a skilled medical worker, or a nurse or some type of practitioner that is they're doing stuff to you to get you better, not to just maintain you.

So it's a pretty strict definition. And it's really people, some people are under the misconception that Medicare covers long term care, which is custodial care, which is stuff like giving you a bath and just taking care of you and feeding you and that kind of thing. And that's not covered by Medicare.

It needs to be skilled, rehabilitative care. And then you're going to be released or decertified because you're better. But for a lot of people, that never happens. They're in poor health, and maybe they get certified for a while. But then eventually, they just get decertified.

Maybe they got to stay in the place. So Medicare isn't gonna do much for you for long term care, other than get you out of the hospital possibly. So and I want to jump into the insurance a little bit. And so it's pretty simple is the Plan G supplement pays everything Medicare doesn't pay, except for that Part B deductible of $233 a year.

When I say everything, I mean everything. If Medicare approves it and pays something on it, and then they hit you with all those deductibles and co payments or the unlimited 20%, that's all paid by the Plan G. So when people actually get sick with this stuff, and they incur big bills, and they've got original Medicare Part A and Part B, and then they have a Plan G or a high option supplement, they're just like waiting for the bills when they come home. And they never come because it's just all covered between the two of them. But still, when it comes to something that's not covered, so like that, when you talk about custodial care or long term care, that supplement doesn't help them there either. And that's why there's long term care.

Yeah, that's why you need long term care insurance, or you need, you need something to prepare for that. And another day, another show, what, what I want to be clear on is Medicare by itself is really better than people think it is. But it still has some pretty big gaps and deductibles and potential out of pocket. And then the supplement comes in, and then it pays almost all of that.

That's the way to go if you can afford it. Now, where people get real confused is when they've been listening to the sales pitches of the Medicare Advantage plans, which I don't want to sound biased against them, because I'm not we sell lots of them. And for the right people, in fact, you have one. That's right. So, you know, it is, they're fine. And really, one of the ways that one of the things the advantages to that is you don't have to pay a premium for Medicare supplement.

Sure. So she just, you go on this Medicare Advantage, and you don't have a supplement when you have Medicare Advantage by your election, you've gone to a private insurance company, and you get your Medicare from the private insurance company that you elect. And so a lot of those are zero premium. And so you're saving the money from the supplement. And you've got smaller deductibles, and smaller limits, or, you know, on your liability. So it's going to pay much better than original Medicare by itself.

But it's not going to pay better than a Medicare and a supplement. Right, because, you know, when I think back to my dad, who, you know, the last year of his life, he was probably out of in and out of the hospital, maybe six times. I mean, he went in, went out, went in, but he had, like you talked about the highest deal, you know, supplement, and he didn't owe nothing.

I mean, it was unbelievable. But, you know, he did go through that bit where they put him in rehab, and, oh, they wanted to decertify and get him out of there, and all that stuff would have cost him money. But when he went home, you know, it didn't end up costing anything.

And away he went. What happens to people is when you talk to somebody that's been on Medicare for 10 years, and they've been sick, and they've been through something major. Now what happens is, instead of thinking Medicare is awful, they think Medicare is great. And they actually think that it's the Medicare supplement that's so great. And those things, Medicare supplements are identical, no matter who you buy them from. And they're going to pay what Medicare doesn't. And most people don't understand Medicare well enough to know that Medicare paid the lion's share of the bill. It's just the supplement came in and paid the rest. And then the Medicare supplement company usually gets all the credit for that, you know, which I'm happy to take if I sold it to you.

But the reality is, it's not really showing a clear picture. Darrell Bock Yeah, because, I mean, when you think about how wonderful it is, you know, I have a friend who really, you know, her husband died, and she has no other income. It's really a difficult situation, just lives on a very small social security, and lives on Medicare. And wow, where would she be without that?

Because her sons aren't in a position to take care of her. And it's like, oh, my goodness, this is a godsend for her. Dr. Gerry Breshears Yeah, yeah, it is. And it's people that are 65 and over are well covered.

I'm going on it next year. And I know exactly what I'm going to do. And I mean, obviously, I work in this, so I know this. But you talk to somebody who's in their 70s or 80s, and they have Medicare, and they have a supplement, or even if they have an Advantage plan, they're going to rave about their Medicare plan, because they owed way less than they did before they were 65 on their group insurance.

And they're aware of it. Dr. Darrell Bock And paid less, right? Because the group insurance had gotten crazy before it went on Medicare. And so, you know, it's the $200 or $300 a month savings not to be on, you know, private health insurance. And like, wow, and the coverage is better?

Like, really? So man, it pays sometimes to get a little bit older. Dr. Gerry Breshears Well, and here's another thing point that I want to make is people like the way it pays so much that they tend to hang on to their Medicare supplement, when they've had the same one for 10 years, when they can switch to exactly the same thing with a different company. And they're willing to pay $100 a month more for the one they know, than the new one.

And that's not helpful. So I mean, what I also want to tell you is if you're paying a lot for your Medicare supplement, get in touch with me or go to our website, we've got a rate calculator on there, just see how much you could save by making a change. And we do that a lot as well. Dr. Darrell Bock Yeah, I hate we run out of time again, before we ran out of show, because there's a lot with this Medicare. But again, the joy of it is we get to keep learning and get to be better stewards of the different plans and the different ideas. We thank you so much, Hans. Again, this show is brought to you by CardinalGuide.com, where you're going to find Hans's contact information, as well as his book, The Complete Cardinal Guide to Planning for and Living in Retirement.

And of course, all this information is on a YouTube video that is called Medicare by Itself, which is beautiful, because Hans has this board where he walks you through the numbers and all that stuff. And that's at Cardinal Advisors and your YouTube channel, right? Dr. Hans Zimmer It is. Thank you. Dr. Darrell Bock Thank you so much, Hans. God bless.

Dr. Hans Zimmer God bless you. Announcer Finishing well is a general discussion and education of the issues facing retirees. CardinalGuide.com, Cardinal Advisors, and Hans Schile CFP sell insurance.

This show does not offer investment products or investment advice. Announcer We hope you enjoyed Finishing Well, brought to you by CardinalGuide.com. Visit CardinalGuide.com for free downloads of this show or previous shows on topics such as Social Security, Medicare, IRAs, long-term care, life insurance, investments, and taxes, as well as Hans' best-selling book, The Complete Cardinal Guide to Planning for and Living in Retirement, and the workbook. Once again, for dozens of free resources, past shows, or to get Hans' book, go to CardinalGuide.com. If you have a question, comment, or suggestion for future shows, click on the Finishing Well radio show on the website and send us a word. Once again, that's CardinalGuide.com. CardinalGuide.com. This is the Truth Network.